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Many individuals in the UK undoubtedly have the goal of becoming wealthier, securing an earlier retirement, and unlocking a passive income that beats the State Pension.
But few often realise just how simple it might be to turn this dream into a reality. All it might take is three simple steps that anyone can start right now.
Prepare, save, invest
In 2026, the stock market continues to be the best way for ordinary people to build long-term wealth. But before someone can begin their wealth-building journey, some preparation’s needed.
The stock market can and will occasionally throw a tantrum, creating substantial volatility in even a diversified portfolio. The same’s true of life in general. A car can suddenly break down, or a leak starts coming through the roof.
To protect against these unexpected scenarios, the first thing investors need to do is build an emergency fund. The amount needed depends on the individual. But a good general rule of thumb is to put aside at least six months of living expenses.
The next step is to start saving consistently. Whenever a paycheck comes in, take a chunk of whatever’s left after critical bills (rent, food, etc.) and keep it aside. Then, finally, with an emergency fund and a healthy monthly savings habit in place, it’s time to start putting those savings to work by investing in the stock market.
If the goal is to beat today’s State Pension of £12,548 a year, then following the 4% withdrawal rule, a portfolio will need to be worth at least £313,700. But by investing a modest sum each month, like £350, at an 8% average annualised rate, this target could be hit within just under 25 years.
Let’s speed things up
Being patient for 25 years is obviously less than ideal. But while there’s no magic bullet to suddenly unlock over 300 grand overnight, there are some clever ways to speed things along, like stock picking.
Anyone who chose to invest £350 each month directly into Goodwin (LSE:GDWN) shares instead of an index fund over the last 15 years is already beating the State Pension.
Since January 2011, Goodwin shares have generated a total return of 2,563%. That’s the equivalent of 24.5% a year. And £350 invested each month during this impressive period is now worth £634,547 in 2026 – enough to double the State Pension!
Still worth considering?
By supplying niche-but-critical alloy castings and other industrial materials, Goodwin has transformed itself into a key supplier for numerous industries, including aerospace, nuclear, and defence, among others.
In 2026, the structural demand for its materials remains in place, and is only being amplified by the growing levels of geopolitical tensions and a fortress balance sheet. But that doesn’t make it risk-free.
Its Mechanical Engineering segment is sensitive to highly cyclical industries like oil & gas as well as mining. And prolonged downturns in these key markets can weigh down on Goodwin’s performance.
Bottom line: at a market cap of £1.8bn, Goodwin shares may struggle to continue generating a near-25% annualised return for shareholders. But there nonetheless remains ample room for growth that investors seeking to eventually beat the State Pension can capitalise on. That’s why I think this stock deserves a closer look in 2026.
